CHAPTER VIII

CONSUMPTION PATTERN IN PUNJAB AND BIHAR

The
Punjab

contrast

between

the

with those of Bihar would

rural labour households of

not be complete unless we look

.into their consumption standards also.

with

consumption pattern

analytical

discussion

of

of

our

the

The present chapter deals

sample

issues.

households.

involved,

For

an

the following

estimates are obtained from our sample data:(1)

the

commoditywise

highlight the

per

capita

variations

consumption

between

expenditure to

the Punjab and the Bihar

situations;
(2)

the

percentage

total

share

of

each

item of consbmption in the

per capita domestic expenditure to study the relative

importance of different items of consumption;

(3)

the

variations

in

the

cash

component

of

consumption

expenditure of such households to focus our attention on the

employer-employee relationship between the two study areas;
(4)

the

distribution

of

consumption

expenditure

to

study

variations in the consumption pattern of different strata of

sample

households

areas; and

within

as

also

between the two study

258

(5)

the

expenditure

bearing

elasticities

implications

for

of

different

commodities

the consumption standards of the

labour households in the two study areas.

The discussion runs into 2 sections.

regarding

the

of

some

critically

major

methodological

developments

measurement of consumption standard , especially in the

estimation of Engel elasticities.

the

Section I reviews

consumption

pattern

of

Section II attempts to analyse

the

sample

householdsin terms of

averages, percentages, expenditure elasticities, etc.

SECTION I
Empirical Approaches .

Consumer Behaviour
The

studies

on

the

economics

of

consumption

are

deservedly popular due to the fact that consumption is considered

to

be

the

economic

be-all

literature,

analysis

the

and

of

end-all

one

comes

consumption

of

all economic activity.

In

across two main approaches for

The

pattern.

first

approach,

popularly known as the 'time-series approach' involves the choice

of

an

consumed
making

appropriate

mathematical

IDFm expressing the quantities

as function of income and relative prices.

use

of the method of multiple regression, its parameters

are estimated from the time series data.

approach

is

Further, by

suitable,

depends

upon

Whether the use of this

the

availability of time

series data on the one hand, and on the precise objectives of the
inquiry,

on

the

other.

But

the

use

of

this

approach

is

259
on

questioned

the

ground

that

many

of

the

relationships,

originally assumed to be stable, may undergo considerable changes

over

The

time.

income

second

empirical

consumption

and

This

households.

paribus clause.
family-budget

expenditure

of

is based upon the

cross-section

of

approach is developed in the mould of ceteris

While making use of this approach, a plethora of

studies 1

from time to time.

investigations

approach

have been conducted in several countries

It needs to be pointed out here that all such

regarding

countries

outside

nationwide

N.S.S.

consumer

India.
data

on

In

behaviour

India,

the

were

made

in

availability

of

household consumption, inception of

planning in 1951 and the compulsions emerging out of the planning

process

and publication of some reports

seem to have stimulated

much empirical interest in studies on consumer behaviour.

1.

Some outstanding earlier contributions in the field of

family-budget studies are by R.G.D. Allen and A.L. Bowley
11
(1935);
Family Expenditures: !:::_Study of its Variations 11 ,
11
London; Henry Schultz (1938);
Theory and Measurement of
11
Demand , University of Chicago Press, Chicago (1972 edn); H.
Wold and L. Jureen (1953); 11 Demand Analysis_;__!:::_ Study in
Econometrics .. , John Wiley and Sons Inc. New York; H.S.
11
Houthakker (1953);
Compensated Changes in Quantities and
Qualities Consumed .. , Review of Economic Studies Vol. XIX
(3), No.
5, pp. 55-64;
---------------- and S.J. Prais
11
(1955);
An
Analysis
of
Family Budgets 11 ,
Cambridge
University Press, Cambridge; Richard Stone (1954); 11 The
Measurement of Consumer Expenditure and Behaviour in the
United
KingdOm.
1920-38 11 ,
Cambridge--university Press,
Cambridge, Vol.
I; and Stigler, G.J (1954); 11 The Early
History of Empirical Studies on Consumption Behaviour in the
United Kingdom 1920-38 11 Journal of Political Economy, Vol.
LXII, No.2, April, pp. 95-113.

2.

Some of these reports are: Argicultural Labour Enquiry

Reports, All Indian Rural Credit Survey, Enquires into the
Family Budgets of Middle Class Employees of the-centrai
Government and Various reports published ~ N.~S~

260

Consequently,
research
revealing

institutes 4
findings

have

research

of

number

large

come

regarding

out

workers

and some

with some interesting and

consumer behaviour.

Some leading

journals 5 have also contributed substantially in this regard.

Admittedly,
study

to

approach,

critically
yet

it

may

it

is

beyond

evaluate
not

be

the

the purview of the present

efficacy

of each empirical

out of place to underline a few

important features of such studies.

3.

See for example, Ravi Verma ( 1 95 9) ; "Inco~e Elasticity of

Demand for Foodgrains: A Regional Approach", Artha Vijnana,
Vol.
I, No.
4, pp. 271-281; S.N. Baldota (1964); "Bias in
Income Elasticity Estimates Derived from Expenditure per
Family Data~ A Note", Artha Vijnana, Vol. 6, No. 1, pp. 3743; N. Sreenivasa, Iyengar (1967); "Some Estimates of Engel
Elasticities
Based on N.S.S. Data",
Journal of Royal
Statistical Society, Series A (General), Vol. 130, pp. 8497; Balvir Singh (1968); "Consumption Functions in India",
Ph.D. Thesis (Unpublished) University of Delhi; Devendra B.
Gupta (1963);
"Consumption Patterns in India..=_~ Study of
Inter
Regional Variations", Tata McGraw Hill Publishing
Co.,
Bombay,
New
Delhi;
R.
Radha Krishna (1977);
"Approximate Determination of Indifference Surface from
Family Budget Data", Artha Vijnana, Vol. XIX, No.3, pp. 247258; and B.M. Mahajan and H. Mahajan (1981 ); "Effects of
Grouping of Observations on Co-efficient of Determination in
Engel Curve Analysis", Artha Vijnana, Vol. XXIII, No.4, pp.
352-365.

4.

For example, Indian Statistical Institute (I.S.I.), Calcutta

has published a magnificent
collection of papers on the
subject
by its research workers.
Similarly, National
Council of Applied Economic Research (N.C.A.E.R.), New Delhi
has also published a very important document entitiled,
"Long Term Projections of Demand and Supply of Selected
Agricultural Commodities, 1960-61 to 1975-76".

5.

In Particular, mention may be made of the following:

Anvesak,
Artha
Vijnana, Econometrica, Indian. Economic
Journal, Economic and Political Weekly, and Journal of Royal
Statistical Societ~etc.

Firstly,
wide

array

periods

of

and

estimating

covering

different

functional

specifications

time

procedure.

The

but a more or less

classical

technique has really ruled the roast.

like

developed

Rudra

least squares
Thirdly, while

have made use of linear expenditure system

originally by Richard Stone, there are others who have

examined
of

of

estimational

scholars

experiences

Secondly, the Indian studies on consumption reveal a

variety

uniform

regional

thus reflecting the effect of different development

situations.
rich

the Indian studies on consumption encompass a

the

impact of grouping of observations on co-efficient

determination

studies,

based

expenditure
ordinarily,

in

the Engel curve formulations. Lastly, most

as they are on N.S.S. consumption data, work out

elasticities
income

rather

figures

than

income

elasticities;

at the household level are just not

available in published reports.

To
periods
the

sum

up, studies conducted in India cover different

of time.

They have followed a variety of techniques for

estimation

of

Engel

elasticities.

Also that a number of

explanations for variations in household expenditure in different

regions (or states) have been offered.
considered

the disproportionate effects of household size on its

consumption,
variations
ample
that
modern

If only these studies had

perhaps
would

testimony
although

their

have
to

been

this

consumption

economics,

yet

it

conclusions
different.

assertion.
has

regarding

regional

Baldota's study bears

It is, therefore, obvious

been of a nebulous character in

has always

been at its very centre.

Consequently,

empirical research in the field of consumption has

been controversial but thrilling experience for the economists.

SECTION

Punjab-Bihar Contrasts

Consumption Pattern

empirical

preceding

the

In

approaches

section,

it

variations
Inasmuch

is

as

on

the

the

section,

consumption

proposed

in

II

to

probe

consumption,

we

have

pattern.

examined

the

In the present

if there exist significant

pattern

of

the

two

states.

two states represent sharp economic contrasts,

the observed differences in the consumption pattern would tend to

reflect
income

the
levels

economic
The
in

.r.sponses
and

growth

rural

better

compared

percolation
better

of

labour

standard

households to rising

of living in areas of fast

with those in the less growing areas.

effects of high growth must reflect

living

conditions

themselves

of the rural people if indeed the

growth process does not become too restricted or too sterile.

We
emerging

deem

it

necessary

to

point

out

some

features

from the consumption data gathered by us. While most of

the

food-items such as cereals, gram and pulses, salt and spices

are

regularly

household,
footwear,
number
than

of
the

consumed

there
etc.,

are

so

reported,

practically by each

other items such as clothing and bedding,

which are not regularly purchased and hence the

positive
total

and

respondents

sample

in their case is markedly less

households.

Similarly, expenditure on

marriage and other social ceremonies is not incurred as regularly

as

on

food

commonly

items. These expenditures are encountered much less

in Bihar than in Punjab, and for obvious reasons, their

inclusion in total per capita expenditures distort the picture of

poverty.

We discuss these details later :

For

the

computation of household expenditure, we have

had to follow a procedure slightly different from the one usually

followed

in

consumption
basis,

N.S.S.

surveys.

expenditure

for

In our case, while information on

food-items was gathered on monthly

the one pertaining to non-food items such as clothing and

bedding,

and

three-monthly

footwear
basis.

could
Again,

be

obtained meaningfully only on

information

about

expenditure on

marriage and social ceremonies was gathered on half yearly basis.

It

may

other

also

be

clarified that items such as pan, tobacco, and

intoxicants

alongwith
since

have

processed

most

expenditure

of

our

figures

food

been

covered

such as beverages, refreshments etc.,

repsondents
for

in food-items and placed

such

could

individual

not

provide
components.

separate
It is

interesting to note that both in Punjab and Bihar, the percentage

of

positive

very
For

for individual items of consumption is

high for some commodity groups and markedly low for others.
example,

states
fuel

respondents

for
and

while

this

percentage

is

very high in both the

items such as cereals, gram and pulses, edible oils,

light,

etc; it is very low for other commodities most

notably, meat, eggs and fish, consumer durables, etc. Mean values
for

the

latter

may

be considered as indicative of qualitative

264
variations

and

households

reporting

and

milk

not quantitative ones.

consumption

products,

vegetables

Again, the percentage of

of certain items such as milk

and

fruits.

gur

and

sugar,

processed food and beverages, etc., varies widely between the two
Such

states.

variations

discovered

in

conveyance

and

in the positive responses can also be

non-food

items

conveyance

such

as

services,

footwear,

medicine

and

education,
health and

miscellaneous goods and services.

To

begin

with,

we

expenditure

against

villages

of

Punjab and Bihar.

contrast

between

we

total

would like to see total household

household

income

for

the

sampl~

Table 8.1 shows a very important

the two states.

For every villages in Punjab,

discover that, on an average, the rural labour households are

saving a part of their annual income.

is

The reality of net savings

indeed a redeeming feature, especially because we are dealing

with people belonging to the lower echelons of the rural society.

The

possibility

of

slight

underestimation

of

consumption

expenditure cannot be ruled out, especially because some items or

a

portion

of

some

items of consumption is earned through kind

wages

or

else is provided free of cost to the labourers at peak

hours

of

work, etc.

by

respondents

with

slightly underplayed.
milk
there
many

and
is

Such accruals in consumption may be missed

the

result

that

consumption figures get

It is as well possible that consumption of

milk products is also under-reported primarily because

a

cases,

tendency to underplay gains on production side.

investment

In

in dairying is institutionally financed

Table

8.1

Average Propensity to ConsUDB of labour Households in Punjab and Bihar

--------------------------------------~~-~~-Y-~!~~J:~E-~~)-----------------------------------------------p
R
H
u
B
B
I
A
N
J
A
------------------------------------------y
y
c
s
c
s

Sl.
No. Village/s

-----~------------.-------------------------

a .:_P.:._c .
(C/Y)

a..!.p~c.

(C/Y)

---------------------------------------------------------------------------------------------------------------10
1
2
7
8
9
3
4
5
6
---------------------------------------------------------------------------------------------------------------3345.11
58.82
0.98
3403.93
V1
6876.53
5494.44
1382.09
1.
0.80
2.

V2

6280.73

5002.94

1277.79

0.80

3758.13

3297.09

461.04

0.88

3.

V3

6454.64

5018.84

1435.80

0.78

3626.36

3321.09

305.27

0.92

4.

V4

7621.18

6099.97

1521.21

0.80

2692.10

2795.42

-103.32

1.04

5.

V5

7243.94

5779.19

1464.75

0.80

3384.60

3326.40

58.20

0.98

6.

V6

6184.84

5060.55

1124.29

0.82

2529.02

2771.44

-242.42

1.10

7.

V7

5253.67

4536.47

717.20

0.86

2360.64

2720.56

-359.92

1.15

8.

VB

5245.12

4704.31

540.81

0.90

2354.48

2555.32

-200.84

1.09

All

6243.06

5058.38

1184.68

0.81

2854.15

2919.14

-64.99

1.02

l'UIH :

1.
2.
3.
4

c
s

= Average Income Level

= Average Consumption Expenditure

= Average Saving Level

a.p.c. = Average Propensity to Consume (C/Y)

266
and the borrowers would almost always under-report the production
and

sale

of

milk.

Unluckily, we have no firm data to go into

these

details or work out the degree of under-estimation. In any

case,

the

moot

point still remains and the possibility of real

savings even among the rural labour households of Punjab need not
be

ruled

the

out. On the other hand, the average picture in most of

Bihar

villages

expenditure

is quite depressing; the annual consumption

overshoots

the

annual

household

income, and as a

consequence, negative savings accrue.

It
dissavings

may be more satisfying to see savings in Punjab and

in

complement

Bihar

of

in

relation

average

to the level of income.

propensity

to

propensity to consume (hereafter a.p.c.).

save

is

the

The

average

We work out a.p.c., as

in Table 8.1
A

well-received

proposition

in

the

literature

on

consumer behaviour is that the higher-income households genarally

save

larger

proposition,
consume
Bihar

we

(a.p.c.)

should
of

of

their

expect,

(i)

income.

Following

this

the average propensity to

Punjab households to be lower than that of

households (ii) within each state, a.p.c. of households in

villages
belonging
Bihar

proportion

located

near

the

town

to be lower compared to those

to the distantly located villages; and (iii) a.p.c. of

households

to

be

relatively

higher than that of Punjab

households at all conceivable distances from the focal town.

Table
regard.

8.1

provides

some

empirical

answers

in this

First, the overall a.p.c. of Punjab households works out

267
to

be

less

(1.02).

than unity (.81) compared with above-unity in Bihar

Secondly,

tendency

in

to

increase

countryside.

Lastly,

than

that

of

both
as

the
we

the

states,

move

into

the

a.p.c. reveals a

the

interior

of the

a.p.c. of Punjab households is lower

Bihar households at all comparable distances from

the focal towns.

Thus
confirms

all

distinct

our

pattern

hypotheses

set

of a.p.c. as observed above

out a little earlier.

These

features of a.p.c. highlight the following important points:

First,
surely,

over

wide

range

of

villages, more

for

those

located

far

countryside,

there

is

unmistakable phenomenon of negative

savings.

In

of

In contrast, the rural labour households in every

Punjab

are

consumption expenditure.
to

22.0

into the interior of the

some villages, the negative savings are as high as

15.0 per cent.

village

the

away

Bihar

per

cent,

showing

net

savings over their annual

The rate of savings varies between 10.0

the

overall figure is nearly 19.0 per cent

which is fairly respectable.

The

accrual

of

attributable to higher income

better

employment

sectors.

This,

developments
hand,

savings
wh~ch

Punjab

is

directly

has been made possible due to

opportunities in the farm as well as non-farm

in turn, seems to have set into motion two major

witnessed

in

Punjab

it has led to the building

dairying

in

~f

over

the years.

On the one

productive assets especially

in the form of milch cattle, while on the other, it has

268

led

to

investments

dwellings,
is

in

household

assets

namely

residential

electricity installation in these dwellings, etc.

It

as

well

fact that household investements in status based

assets

such

as radio, watch, fan, other consumer durables, etc,

commenced much earlier in the case of Punjab while such items are
perhaps catching up in Bihar only in recent years.
be

surprise

that

radio/transistor,

in

Punjab

watch,

we

discovered

It should not
items

such as

fan etc. in a preponderant majority of

our sample households, while in Bihar not more than 10 households

reported
unity

possession

of

such

items.

Second, the greater-than-

a.p.c. of Bihar households implies that such households do

not earn sufficient income to finance their household expenditure

and are incurring deficit as a consequence.
show

that

under-take
them
of

such
petty

under

households

are

invariably obliged to

consumption loans which, in turn, tend to keep

feudal and semi-feudal stranglehold.

perpetual

consumption
relations

deficit

There are studies to

indebtedness
deficits.

in

the

is

That

agriculture

The phenomenon

natural fall-out of recurring

is how, the semi-feudal production

of Bihar are variously explained

through consumption-credit employment nexus 6

-----------------------------------------------------------------

6.

For a detailed meaningful discussion on the subject please

see, Pradhan H. Prasad (1973);
"Production Relations :
Achilles'
Heel of Indian Planning", Economic and Political
Weekly, Vol. VIII, No.19, Special Article, May-12, pp.869872;
----(1974);
"Reactinary Role of Usurer's Capital in
Rural India", Economic and Political Weekly, Vol. IX, Nos.
32-34, Special Number, August, pp. 1305-1308; and Amit
Bhaduri (1973); "A Study in Agricultural Backwardness under
Semi-Feudalism", The Economic Journal, Vol.83, March, pp.
120-137.

contrasting

to

that in Bihar would pose a natural question. Do the

relation
labour

households

consumption
brethern

consumption

in

Punjab

priorities
in

observe

compared

Bihar?

scenario

with

comparison

of

in

Punjab

different

their

less

percentage

set

in

of

fortunate
share

of

expenditure under each commodity group may provide reliable clues

in this regard.
percentage

The figures in parentheses in Table 8.2 are such

shares

and

may, therefore, be taken as indicator of

such priorities across villages in Punjab and Bihar.

It
incur
on

is

about

evident

that

in Punjab, the sample

household~

72.0 per cent of their totQl pQr capita expenditure

food items

with a relatively higher figure of nearly

compa~ed

75.0

per

cent in Bihar.

28.0

per

cent in Punjab, their share is relatively low at about

22.0

per cent in Bihar.

is

made,

products,
contras~

than
in

it
gur

If a detailed examination of food-items

obvious that in Punjab, cereals, milk and milk.

and

sugar

expenditure

55.0
sharp

is

While non-food items account for about

on

are the items of high priorities.

cereals

alone occupies a little more

per cent of the total per capita expenditure in Bihar

contrast

households

are

basic

human

still

to

to only 31.0 per cent in Punjab.

obviously

existence

earmark

more

'adequately'

The'Punjab

fed as far as items for

are concerned; their Bihar brethern have

than half of their total expenditure on

assuring sheer existence to themselves.

)

In

Tabie 8.2 Villagewise and Corocoditywise Per Capita Annual Consutptlon txoenditure in Punjab and Bihar
<Mean Value in Rs.l
Sl.
flo.

Commoditv

State
Averaqe

Group

No. of

Reoression Eouation
\'i . :: (/( + ,0. Dj
.~

Observations

'

(N)

---------------------------~-----------------------------------------~-----------------------------------------------------------------------------------------------

'

!0

11

14

12

---------------------------!------------#---------l---------t-----~---1---------#---------l--------j--------t----------i---------'--------~--------~------------#--

i.

C:erEai~-

and Cereal

PJB

27i.12
126.76i
10Ul6
310.90

PF'R

244.26
(24.58)
10e.eo
321.35
(50.52i
!@:iLea

PJB

3~.19

100.00

32.56
(3.!4l
~-s. 74

37.39
(5.88)

30.84
(5.04)

Products
PPR
BHR

2. Gram and Pulses

(3. ~4)

PPR
BHR

3.

Ediole Oils

PPR

101~.00

PJB

40~61

.PPR

\4.@8)
m.00

BHR

31.77

PPR

(4.99)
100.00

(5~.80!

1e~.e0

290.19
(29.21)
i00.~0

332.79
(54.39)
100.011

S'1.89

36.61
<3.691
100.00
38.38
(6.27i
96.15

(4. 26)

43.31
(4.36!

m.00
25.40
(4.15)

10B.00

100.0~

29.48
(4.82)
100.00

!314.41
<34.67l
1iill.00
329.67
<55.38)
10i.U0
~6.72
i

!4.05)

l00.~0

: 35.97
: (6.06)
10~.00

43.73
(4.82)
100.00
25.41
!4.2Bl
100.00

298.0i
(31,251
100.~0

3lliL17
(54.961
100.00

36.79
13.85)
120.00
ft.

310.12
(31.79!
10B.0o
278.85
(56.40)
10~.00

278.58
(58.03!
100.00

334.06
(36.09)
!0C.00
280.57
(58.91)
100.00

296.38
(55.23)
100.00

39.83

45.04

45.67

37.99

(4.08!

(5.28!

(4.93)
100.00

(3. 92)

10@.00

330.32
(38.69)
100.0~

10~.00

(5.911
10@.00

33.26
(6. 73)
97.65

30.37
(6.33)

42.55

44.22

!4.46)
1011.00

(4.53!
100.0a

24.18
(4. 31)

23.46
(4. 75)

43.17
(5.06)
100.00
21.39

~-::

,)~.ow

100.00

100.00

298.76
(30.82)
1~\Uil

26~.~6

\6.20)
97.67

44.56
!4.8!)
96.15

43.50
(4.49)
99.67

22.03
(4.63!

24.6~

(4.46i

100.00

!0@.00

H.25

(4.58)
!00.00

4.4~.

31}0

(L;!J

Yi = 327.80- 3.14*i)

Yi ::

31.1! + 0.83 D
[5.39]

298

Yi = 37.77- 0.37"D
(-3.15]

293

Yi = 42.55

0.13D

299

99~33

31.35
(6.58i
100.00

97.37

Yi ::

[0.63]

Yi = 29.49 - e ~~u
(-5.10J

300

N
-..::!
0

4. Milk and Milk

Products

Meat,Eqgs and Fish

(1.031

(1.41)

!2.i6i

20.00

7.89

5.77

17.33
2.91

0.08
7. 6S'
0.26
(0.06)

- 0. 31'1

(~.181

9.52

.FP
..). ~

9.41

1.99
0.23
14.29
Ul2
(0. 21)
10.53

11.71

0.38
21.74
0.74
(~. !3l

1.se
0.15
7.94
1.31
(~. 26)

48.25
(5.32l

48.43
(5.08)

44.96
(4.6!)

39.57
(4.63)

43.01
(4.65)

49.23

(13. 49)

11!. 74
(12.321

!18.92
i 12. 46)

115.16
i 11. Bll

100.00
31.29
(5.11 1

10~.~0

tee.e~

i 1. 64i

15.61
(2.63)

Hl8.00
19.27
(3.441

100.00
15.57
(3.15)

PPR

30.77

35.14

7.69

14.29

20.00

F'JB

7.51
(0. 761
42.86

4.04

3.31
(0. 33i
16.67

3.60

BHR
PPR
6. Vegetables and Fruits PJB
F'F'R

BHR
PPR

8. Salt and Spices

6.70

118.35
(12. 21l
WU0
14.83

134.02

PPR

7. Gur and Suqar

!03.26
(11.16)

123.29
(11.881

PPR
BHR

5,

93.34
(10.93)
100.00
4.96

120.64
!12.14)
10iU0
21.28
{3.34)

PJB

PJB

(0.3~')

19.15

2.81

2.30
(~. 36)
::3.08

jP Q?

55.63
(5.60)

61.25
(5.90)

100.00
17.85

1BB.00
13.98

(~.461

(2.81l
E0. 77

(2.29)
78.38

65.34
(6. 57l

74.5~

10.05

0.53
(@. 09l
7.69

51.21
(5.16)
98.72
11.32
(1.85!
~.3.85
6~'.03

(7.18)

(6.95)

PPR

i00.0B

100.00

. 100.00

BHR

4. !4
(0.65i

5.61
(0.92)
42.31
31.1.45
C5.07l

PPR

38.46

4.24
(0.69)
45.95

PJB

28.83
(2.90!

31.53
(3.04)

PF'R

100.00

1~0.00

100.00

-)
i 11/
l.o\UC

100.~0

8.54
(1.44)
52.38

54.52
(6. 01 i
10~.00

3.74
l0.63)

10~.~0

7.99.
(1.42!
53.33

(1:;. 39)

100.00

42.86

2.46
(0.44)
26.67

10~.~0

97.14

10~.00

100.~0

5.35

9.05
(1.83!
61. i8

5.08
(1.06)
42.11

(1.12)
42.31

64.80

56.88

53.67

(6. 64)

100.00
3.11

(6.66)
100.00

35.29

2.58
(3.54!
.36.84

(3.46)

28.42
!2.98)

32.77
!3.36l

33.95
(3.98)

100.00

100.00

100.00

100.00

(0.63)

(5.80)
10~.00

2.97
(lt62l

38.46
3h

77

(3.97)

100.00

Yi =

136.2~

- 2.10 D

300 .

[-3.76]

Yi =

84.0'i + 0.190

52

[~.13)

Yi =

**~

2i.i7 - 1.43 D

48

( -1.71 j

16.00
1. 25

Yi =

12.53 -

e. i5D
[-0.87]

Yi =

60.08 -

1.2! D
H.8t.j

'ii =

21. [6 - C. 54 D
[ -5.41 J

(0.fi3)
11. e10

(5. 08,i

99.33
9.39
( 1. 751

57.67
65.03
(6. 71)

Y1 =

""
1!.20- 0.22"D

3.48
(0.65}
38.33

31.8!
(3.29)
10~.0~

*
[-4.74]

1~~.~0

[-3.73)

Yi =

33

28.82 + 0.3:; D
[2.35j

i73

1.

F'rocessed Food.
Bever 2.qes., F' an.

BHR

22.95
i3. 61)

2U6
13.29)

F'PR

100.00

100.00

PJB

79.54
(8.00)

78.33

Tob3ccc, etc.

BHR

PPR
A.

A1 1 food

Iter.~s

PJB

BHF:

PPR
FJB

(7. 551

10~.@0

24.32
(3.8:2)
84.62

21.70
,..,.

C:l:''

!il0.00

35.05

47.3~

!3.86)

(4. 97)

1CU~0

{4.59)

~~~Ul0

1eu.~~

te~.0~

1.3.34

1.12

Hl. 99

!4.03

i2.18)

( 1. 961

(2.84)
72.94

17.48
(3.64)

100.00
32.6!
(3.82}
!~~.. ~~
. .., ac
1 ~' ,J

(2.80)

18.07

(3.79)
100.00
7-=

!:'

,)L, LJ

1~.58
(3,f.5i

73.0~

7131.25
(72.:;4)

675.77'
(74.5i)

685. 12

698.09

676.88

(71.82i

(71.56)

(7~'.28)

(74.96!

1~G.c~

t~0.~c

10~.~0

te~.0~

1e~.c~

1~0.00

1~~.0~

10~.oc

483.34

461.31

463.18

47.13

426.06

398.38

374.91

377.67

100.00
417.35

(75.98)

\75.371

(75.71i

!75.34)

!75.98!

\8~.58)

i78.i0i

(79.3B!

(77,77)

100.00

100.00

!00.~0

108.~0

100.00

10~.00

100.00

100.0~

1~0.00

48.28

41.93

47.05

;:~.061

(5.12)

(5, 51)

I~G.~0

43.52
(4, 8~i
101U0

10~.0~

!0~.00

23.76

23.03

2~. 60

21.il!

::0.69

(3.88!

(3. 88)

(3, 67i
! 0iil.00

(4.25)
1\%U0

(4. 31.l

48.98
!.i1,, QTi
, ... ,

(5. !Jl

23.80

23.27
!3.80)

58.86
(5.92!
47.62

64.70
(6.23)

5J.23
(5.06i

10~.00

47.35

45.67
(5.~4)

Jb 7Q
..;,

r::

(5.27}
10~.00

20.05
(4. 21)

!~fU@

21~

[-4.34]

V' =

718.35 - 2.11D
[-f1.95J

'*

'ii = 642.78 - 1C.60 D

f-6.23]

49.b9
(5. 1.3}
1~0.00

21.68

Yi =

(-3.95j

(lf.e~j

lfHl. H'il

55.32

(4. 77}
43.59

41.78
(6.57)

28.28

29.B9

42.86
28.24

33.17
f3. 48!
34.78
29.9!

(4.62!

(4.88)

(4.76!

(5.33)

(4.38)

(4.66)

(3.82i

25.30
(4. 72i

50.00

43.24

50.00

47.62

66.67

38.82

36.84

36.~4

42.67

(5.78)
44.44
21.64

[-3.36]

14.60
(2. 721

716.58
(72.14}

76.32

fie

0.24D

L-2.54J

t7~.04J

""'~

21.98-

53.47

!3.47i
H1Ui0
10.37
(2.18)
65.38

726.81

.,.I.:;;,.)..;.
...

Yi =

100.~0

672.55
(67,6l)

PJ8

F'F'R

10iU~

"7T
10, .tv
(3.99)

76.92

100.00

pNi

(3.21)

19. 10
(3, 41!

75.68

100.00

BHH

19.01

(!.54)
61.90

~.)' J,.J}

PPR
Bed dina

58.44
(5.88)

100.00

{3, 74)

il. Clothing a.nd

100.~3

100.0a

10a.e0

BHH

21.68
(3.55)

41.75
(4.69)

37.08

41U0

22.36

42.31
18.23

(4.~1i

50.1@
(5. 17}

Yi = 118.59 - 0. 78D

!34

[-0.81]

44.67
Yi =

l28

r-2.m
N
--J.
N

 12. Footwear

PJB
PF'R
BHF:

13. Education

!0. 97l

!0. 77l

t0.84l

36.17
1. 39

32.05
1.96

42.86

HU31

16.22

PJB

11.94
(1.20!

7.23
(0. 70i

F'PF:

66.67
5.30
(0.83l
34.62

48.94
2.18
(0.36)
21.62

PJB

8.71

F'PR

{0.88!
38.10

BHR

2.6B
HJ.14l

PPR

30.77

PJB

37.19

BHR

lb.

Consumer Durables

7.59

(UBi

(0.65!

PPR

7.65

38.C9
4.13
311.77

Conveyance Services

!5. Medicine and Health

10.07

PPR

PPR
BHR

14. Conveyance and

9.91

(3. 741
80.95

11.34
{ 1. 781

(\1.32!
34.62

9.64
(0.971
43.59
0.28

7.42
(0.76)
36.51

5.73
(0.621
34.62
0.95
(0.20)
17.31

!. 45

1. 50

9.30
(0.96)

7.16
(0.84!

8.80

~.16

(0.95)

46.03
0.92
(0.19)

42.86
0.85
(0.18)

46.15
0.84
(0.18)

(0.94)
47.67

11.76

13.16

!1.54

1. 63
(0.30)
16.33

5.67
(0.61)

(0. 91)

3~.

42.67

(0.261

(0.301

33.33

<61

10.21
(1.13)
57.14

11.74
(!. 23)
52.17

.,

ii

.J.i.i.

(0. 541

7.69

23.81

11.07

8.86

tUJ7i

(@.89)
43.59

7.15
(0. 79!
42.86

2.58

1.16

(0.421
30.77

(0.19)

14.29

2.80
(0. 50)
26.67
11.03
i!. 16)

60.87
2.80
(0.501
40.00

22.57
(2.27i

24.79

85.71
7.45

( 1. 431

58. 97.
8.05
( 1. 32)

( 1. 26i

7.16
( 1. 28)

27.01
(7.60)
55.32
8.76

P .b..J
'r

5.98
(0.70)
31.43
0.62
(0.!3)
7.89

1. 54
iki.261
19.05

(0.05!

44.68
1. 74
(0.281
24.32

5.38
(0.56)
30.43

26. !0
(2. 741

78.26

9.18

6.19
. (0. 72)
37.14
42.66
1. 52
i. 30
(0. 27)
(0.31)
(@. 94i

23.53

18.42

(0.21)
!5.38

23.30
(2.39)
65.08
6.49
( 1. 31)

20.11

18.86

(2, 36)

12.04)
57. 6~'

PPR

53.85

45.95

46.! 5

47.62

46.67

36.47

PJB

17.12
(1. 721

11.50

12.40

18.18

29.09

(1.11 I
19.15

(1.25)
23.08

(2,1:)0)

(3, 05)

11.14
(1.14)

42.86

30.43

15.87

PPR

28.57

77
!.01

65.71

5.31
(1.10)
34.21

5.71

7.60

Yi

(0.78)
34.33
1. 55

Yi =

(0.29)

27.76- 0.66 D
[-!.98]
10.04 - 0.25D
H.70j

103

59

!9.67

8.80

!. 66
(0. 31)

[-~. 19]

Yi =

13.43 - 0.40lD

49

[-2.7~]

*"

23.47 - 0.34 D

128

Yi =

8.i4-0.!0D
[-1.76J

6S'

Yi =

46.20 - 0.99 D

\'i

23.00
24.15
(2.49)
64.00
7.14

( 1. 2~)

/1
,l

32.69

40.33

10.51

5.04

( 1.23)
! 7.14

(@.54)

12.88
( 1. 33)

15.38

21.00

!92

[-4.56]
Yi =

jQ , .

.. -l

**

0.J7:.~:D

[ -1.83j

-.."''
~a.j.}

y~ ~

6lt87 - 0. 060
[-0.05]

63

-.
BHR

PPR
17. Mi scellaneious
Goods and Services

1.76
(0.29)
24.32

30.20

31.73

\3.041

PFR
BfiR

18. Total Non-Food Items

- 3.67
(0.58!
38.46

PJB

1~.

Marri2ae and Social

PH;

' u.

Ceremonies

(2.!1)

(2.65)

26.72
(2.741

9.3~'
( 1. 67)

7.84
{1. 59}

72.97

76.92

222.93

216.21
<2ID.84i

187.65
\18.891
110.00
79.91

176.28
\19.44!
100.00
73.72

(13.06!

/j'i
J.."t'':0\
.....

100;00
100.43
!00.~0

98.38
\9.90)
52.38
"'!7

(8.23)
53.85
993.86
(!00.00)

BHR

25. 3.2

13.~8

.u.. ~~

20. Total Vearlv

E;:pendi ture

19.17

(1. 36)
71. 4:)

C'-

PPR

28.95
\2.91)
100.30
9.73

1.37
(0.24)
26.67

100.~0

(15. 79)

PPR

23.08

0.99
10.17)
23.80

100.00
7.81
( 1. 231

G2.43i

FPR
BHR

(3.26)

3.66
(@.60)

8.10
( 1. 32)

100.~0

75.48
{12. 33}
100.00

( 1. 59)

89.06

(G I?\

!B. :m
4P. n
68.73

5U6

75.24
!12.29)
67.57

8.10

1.16
(0.24)
15.79

(2.78)
100.00
5. 17

0.99
(0.211
13.46

1.82
(0.34)
21.67

y; =

23.58
(2.55)

27.43
!:2.83)

Yi =

.. , .,.'I

Yi =

12. i 1 - 0. t 4 D

5.68

( 1. 08!

! 1.1 S'l

7.42
\L38i

7~.59

cr '":i
J ...I,..::_Q

61.54

68.67

190.12
119.93!
100.10
75.48
(13. 46)

193.40
\19.83)

162.50
(19.03)

153.52
(16.59)

189.83
(19.58)

1B~.~0

100.00

10~.00

62.72

57.45

(12.69)

(11.

100.00

!00.~0

100.06

53.46
(11.22!
!00.00

78. 6:.

84.02

14.41

97)

(11.23!
53.85

(12.23)
52.38

(10.56)
46.67

(6. 73)

906.97

953.88

975.50

853.79

925.51

!100. 00)

(100.00)

(100.00)

(100.~@)

1110.0~)

(100.~01

560.77
i10UJ0i

494.37
(!0~.001

480.03
11@0.00)

(9.481
44.23

476.26

536.64

(100.1ii~J

11~0.0~1

Yi = 642.78 - 1~.~ D
[-6.23]

611.82

593.45
11~0.001

PJB

81.82

86.48

82.77

75.58

79. 4~

81.29

71.15 ' 77.13

80.78

1980-81 prices)

BKF:

53.01

5!.1l0

50.99

49.45

46.73

41.20

40.90

39.69

44.72

22. Per Capita Monthlv

PJB
BHR

99.89
51.76

104.49
57.09

100.41
54.64

p-.
97'.;.;./..

s1.65

45.06

47.88

95.02
37.64

77.74
35.12

84.93
36.81

95.04
43.21

Expe-nditure (at

148

[-0.81]
Yi = Hl40.95 - 8.~ D

1100.~01

136

[-0.72]

969.37
(100. 00)

612.03

or ices)

= 89. 87 - 2.*i b D

Vi = 116.66 - 1.38D

33.27

(1011.001

(at 1980-B!

Yi

51.10
(9.52)
49.33

39.68

...........

636.10

I~come

[-2.48)'

45.13

34.78
c:o .-..7:

206

Yi = 217.66 - 3.2!:. D

Yi = 201.83 - 3.61D

1100.00!

21. Per Capita Monthly

78.29
(8.08)

72.6ll

55.26

0.51 D
[-2.3:.j

78.20
(8.45)
50.00

(8.6!)

38.82

*'

l-4.9~']

(12.

b5

[-2.33J

100.0\:l

68.19

~ I

71)
Hl0.00

(8.25)

34.29
47.67

9,86 - 0.170
(-:0.92)

1~0.00

54.90
(6.05)
71.43

1037.70
(!01UJ0)

21.18

10~1.0\l

!00.00

94.68

1.80
(~.36)

--------------~------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE:

t cc .. Jt'2s significance of 't' values at 95.~ oer cent level of confidence

**denotes siqnifican~e ~f 't' values at 9~.0 per cent level of c~nfidence

275

It
distance

from

commodity
pattern

is also evident from Table 8.2 that irrespective of

the

f9cal

town, the relative

sha~iofdifferent

groups mentioned above register more or less a similar

in both the states.

the

exception

the

percentage shares of all other commodity groups in the total

per

capita expenditure, are higher for Punjab households compared

with

Bihar

increases

Further,

with

in

cereals, gram and pulses and salt and spices,

households in villages near as well as away from the

town.

focal

town

of

It is interesting to note that with

the

while

increase
two

the

percentage

share of cereals

in rural-urban distance from the focal

states,

the

shares of meat, eggs, and fish,

vegetables

and fruits, etc. tend to display a declining pattern.

This

be

may

nutritious
account

considered

food

enjoyed

as
by

an

indicator

households

in

of

slightly

more

nearby villages on

of the more pronounced impact of urbanisation on the one

hand, and relatively higher income levels, on the other.

Among
and

light,

sundry

cosmetics,

and

tax

for

11.0

than

per

consumption
figures

for

those

non-food

miscellaneous

amusements,

account

the

paid

goods

articles

and services (cinema and other

such

as soap etc, barber charges,

on consumer durables), medicine and health

major proportion (nearly 16.0 per cent in Punjab

cent

in

expenditure.

Bihar)
Also,

such items are

in

items, clothing and bedding, fuel

the

of

the total per capita annual

since the respective percentage

re~atively

corresponding

higher in Punjab villages

Bihar

improved living standards for the former.

villages, it reflects
Put in another way, it

shows
to

that

Punjab households being relatively free of the worry

arrange

a square meal, are bringing in more and more of non-

food

in

items;

expenditure
health,
those
in

by

to

fuel
in

particular,

items such as clothing and bedding, medicine and

and light, etc. by Punjab households compared with

Biha~

the

desperate

alloation of higher proportions of

signifies the consumption reorientations ushered

expanding levels of household incomes in

picture

components

of

of

Bihar

non-food

households,

items

are

as

far

Punjab~

The

as important

concerned, stands

out more

starkly if indeed we look at the abysmally low per capita figures

for most of the items (Table 8.2).
In
capita
for

brief,

expenditure

it

is clear that the absolute level of per

on all items of consumption is fairly higher

the rural labour- households of Punjab compared with those of

Bihar,
among

in
the

consumption

the overall sense as also in each pairwise comparison

villages
basket

of
in

the
Bihar

two

states.

reveals a more

In

particular, the
pronounced cereal

orientation and thus inferior in content while the same in Punjab

reveals

stress

on

relatively more diversified combination with a rising

non-food

items. Nevertheless, more or less, the same

set of priorities are observed in both the areas.

consumption

habits

do

commodity

substitutions;

food;

the

in

food

not

seem

In this sense,

to have led to drastic inter-

a big component of expenditure goes to

basket cereals and other items are consumed

according to a more or less fixed degree of necessity; nearly all

277

non-food

items

occur

in

the

consumption

basket of

states,

again in the same order of importance.

feature

is

wide

variation

in

both the

The most crucial

the actual level of consumption

between the two areas.

Cash Component of Expenditure
It

has

been brought out in quite a number of studies

that consumption ties play a very crucial role in determining the

agriculture
implies

for

that

in

relationship

employer-employee

certain

parts

of

Indian

the type of households we are dealing with.

besides

market

purchases,

such

households

It
are

heavily dependent on their respective employers for meeting their

consumption

requirements

in

more

than one way.

For instance,

even though cultivation of owned or leased-in tiny pieces of land

also

contributes,

basekt,
as

yet

wheat

and

shared

above

all

Moreover,
loans

extent,

in their total consumption

paddy harvesting, other perquisites'

(meals, tea,

by the working members from employer's kitchen and

the cultivation of wage-received land by the attached

servants

proportion

some

it is the wages receiyedin kind for operations such

ect.)

farm

to

of
the

in

Bihar,

which

constitute

a very significant

total consumption expenditure of such households.

practice

of

contracting

occasional consumption

(both cash and kind), from the employer-farmer, is another

method

for creating and sustaining dependence of such hou:::ati<;)lO.S

on their concerned employers.

---------------------------------------------------------------7.

Pradhan H. Prasad (1973 and 1974); Ibid. p. 870 and p.1305

Amit Bhaduri (1973);
Ibid, p.122.

278

In
to

view of the facts mentioned above, it is, important

examine

the

other

exercise

reflecting
is

component
Punjab
this
out

the ratio of two components of consumption (cash and

also

dependence

the

employer).

Such an

expected to be useful in knowing, if the cash

expenditure

of

on

reveals any

distinct pattern between

Bihar in terms of distance form the focal town.

and

For

purpose, we have estimated the percentage of cash component

of

the

total

consumptiod.

In

expenditure
this

made on the individual items of

regard, Table 8.3 provides the following

meaningful information.
for items such as salt and spices and processed

First,
food
etc.)

(including
among

beverages,

the

food

pan, tobacco and other intoxicants,

items,

and,

education,

conveyance and

conveyance services, medicine and health, miscellaneous goods and

services,

consumer

marriageand~other

durables among the non-food items as also on

social ceremonies, the entire expenditure is in

cash, both in Punjab and Bihar.

Secondly, on commodities such as

gur and sugar, edible oils, vegetables and fruits, meat, eggs and
fish,

gram

bedding,

and

pulses

footwear,

expenditure

among

etc.,

the food items, and clothing and

among

the

non-food

items, cash

makes up a very high proportion of total expenditure

incurred on them, both in Punjab and Bihar.

However, such broad similarities notwithstanding, there
are

some

instance,

important
at

the

differences
aggregate

between Punjab and Bihar.

level,

the

proportion

of

For
cash

279
Table 8.3
Cash Bxpenditure as Percentage of Total Expenditure on an Item in Punjab and Bihar.

Item

S.l.

No.
1

1.
2.

5.

V5

V6

V7

VB

10

11

PJB

61.03
35.71

61.01
49.55

46.40
21.59

37.46
12.82

39.41
17.31

42.83
28.51

,37.32
17.67

32.33
14.80

45.14
25.90

77.05
64.39

71.26
68.68

68.55
51.56

62.11
38.84

66.52
42.65

63.85
68.56

59.89
58.44

56.32
59.03

65.64
60.39

78.86
79.60

71.38
81.34

69.24
66.21

60.65
71.85

66.62
66.29

64.24
80.43

58.57
81.29

56.81
86.23

66.41
78.65

37.27
35.33

39.77
12.61

21.16
0.00

14.08
13.32

13.69
0.00

33.57
11.86

33.71
12.73

30.16
0.00

28.60
12.56

100.00 100.00
68.95
75.10

81.50
0.00

n.r
100.00

59.68
45.09

81.24
58.15

88.05
30.88

100.00
0.00

88.53
54.82

Gram and Pulses

PJB
PJB
PJB
BHR

Meat, Eggs and Fish PJB

BHR

6.

7.

Vegetables, Fruits,
etc.
Gur and Sugar

All
Household

V4

BHR

Milk and Milk

Products

V3

BHR

4.

V2

Cereals and Cereal

Products

Edible Oils

V1

BHR

3.

State

PJB
BHR

PJB
BHR

12

73,38
82.31

66.54
85.59

70.41
66.48

60.55
69.73

68.19
70.88

64.74
80.23

57.86
80,68

56.27
82.37

66.11
79.23

94.60
78.00

100.00
82.23

95.02
59.77

100.00
74.28

91.77
77.49

98.22
81.14

100.00
76.67

93.44
85.50

96.73
77.73

8.

Salt and Spices

PJB
BHR

100.00 100.00 100.00 100.00

100.00 100.00 100.00 100.00

100.00 100.00
100.00 100.00

100.00
100.00

100.00 100.00
100.00 100.00

9.

Processed Food,
Beverages, Pan,
Tobacco, etc.

PJB
BHR

100.00 100.00 100.00 100.00

100.00 100.00 100.00 100.00

100.00
100.00

100.00
100.00

100.00
100.00

100.00
100.00

100.00
100.00

A.

All Food-1 tam

PJB
ffiR

68.89
48.78

68.46
56.19'.

56.76
33.77

48.78
26.20

50.07
28.29

56.26
41.71

52.10
32.93

48.01
30.28

57.24
38.98

10. FUel and Light

PJB

45.76
48.74

55.36
41.09

44.41
39.44

38.57
33.59

22.39
28.11

40.33
37.48

37.39
34.81

27.70
32.89

41.21
37.36

100.00
99.31

100.00
97.06

98.57
94.85

100.00
98.10

100.00
95.35

98.37
98.86

99.25
100.00

99.15
98.32

99.21
97.99

100.00 100.00
98.36
95.30

98.42
77.07

100.00
89.25

100.00
70.62

97.56
95.87

98.03
100.00

98.36
92.85

98.86
92.42

100.00 100.00
100.00 100.00

100.00
100.00

100.00
1.00.00

100.00 100.00 100.00

100.00 100.00 100.00

100.00
100.00

100.00
100.00

BHR
11. Clothing and Bedding

PJB
BHR

12. Footwear

PJB
BHR

13 Education

PJB
8HR

14. Conveyance 6 Co~~

PJB
BHR

100,00 100.00 100.00 100.00

100.00 100.00 100.00 100.00

100.00 100.00
100.00 100.00

100.00
100.00

100.00
100.00

100.00
100.00

15. Medicine and Health

PJB
BHR

100.00 100.00 100.00 100.00 100.00 100.00

100.00 100.00 100,00 100.00 100.00 100,00

100.00
100.00

100.00
100.00

100.00
100.00

16. Consumer Durables

PJB

100.00 100.00 100.00 100.00 100.00

100.00 100.00 100.00 100.00 100.00

100.00 100.00 100.00

100.00 100.00 100.00

100.00
100.00

ance Services

BHR

17. Miscellaneous Goods

and Services
B.

PJB
BHR

All Non-food 1 tems

PJB
IH{

c. Total
D.
B.

Food+Non-food

PJB

itam

IllR

Marriage and Social

Cer9100nies

PJB
BHR'

Total ftlusehold

PJB

Bxpend1 ture

BE

N0rB :

100.00
100,00

100.00 100.00 100.00 100.00 100.00

100.00 100.00 100.00 100.00 100.00

100.00
100.00

100.00 100.00
100.00 100.00

88.56
88.38

89.21
82.08

84.04
80.03

85.86
79.92

80.99
78.86

83.80
78.79

81.71
77.03

78.52
75.24

84.42
80.01

73.82
56.02

73.11
60.10

62.09
40.50

56.46
34.34

56.70
36.22

61.99
46.70

57.68
38.77

53.68
36.06

62.87
44.88

100.00 100.00
100.00 100.00

100.00
100.00

100.00
100.00

100.00
100.00

100.00
100.00

100.00 100.00
100.00 100.00

100.00
100.00

65.61
46.61

59.72
41.34

60.50
42.03

65.76
49.93

76.00
59.46

75.48
64.72

(i)

PJB

Pan jab

(ill

BHR

Bihar

(iii)

n.r.

Expenditure not reported by any sample household.

58.43
44.67

58.02
41.70

65.98
48.16

~0

component
labour

in

the

total

households

against

is

consumption

higher

in

expenditure

Punjab (nearly 66.0 per cent)

about 48.0 per cent in Bihar.

purchases
against

for

all

only

of the rural

Again the share of market

food-items is nearly 57.0 per cent in Punjab

39.0

per cent in Bihar.

Similarly, approximately

45.0

per cent of cereal requirements in Punjab and just 26.0 per

cent

in Bihar are met through market

roughly

55.0

nearly

74.0

coffers

per

working

cent of the cereal requirements in Punjab and

per

through

purchases. In other words,

cent

in

Bihar are met largely from employers

wages in kind and other perquisites received by

members

and

petty

consumption

loans

obtained

from

employers. Viewed in this sense, our study shows that consumption

ties

between employer-employee relations are relatively stronger

in Bihar than in Punjab where wage payment in cash has emerged on

a

wide scale after the onset of the Green Revolution, especially

after

rice

Moreover

culitvation

in

component
Bihar.

most

in
In

analysis.

The

dependence

on

inflationary
other

hand,

other

the
this

context,

consumption,

share of cash

two important points emerge from our

greater

market purchases, are comparatively more prone to

pressures than their counterparts in Bihar.
it

is

on

only

It

of

Punjab labour households owing to their

labour

involved.

items

on a big scale in early 1970s.

total expenditure is higher in Punjab than in

agricultural
cereals,

started

fairly

evident

that

the

On the

employment

of

in Bihar is very highly on kind-wage basis;

about

follows

26.0

that

the

per

cent of cash expenditure is

employer~employee

relations in

281

Bihar

are

much

including
Bihar.

different

consumption
The

believed

ties

exploitative

consequence.

There

about

than

is

in

Punjab; informal contracts

seem to prevail in large measure in

nature

of

such

ties

follows

as a

perhaps some truth in what is generally

employment-credit-consumption

interlockings-

prevailing in the semi-feudal agrarian structure of Bihar.

If a comparison is made between the consumption pattern
of

Punjab

and Bihar labour households in terms of distance from

focal

town, we observe that cash component as proportion of

the
total

expenditure

nearly

58.0

tends

to decline from about 76.0 per cent to

per cent in Punjab and from nearly 59.0 per cent to

about 42.0 per cent in Bihar as we move away from the focal town.
Again,

in

the

expenditure
cent

in

cent

of

all food-items, the proportion of cash

declines from nearly 69.0 per cent to about 48.0 per

Punjab,

in

cereals

case

and from about 49.0 per cent to about 30.0 per

Bihar.

Similarly,

declines

the

share of cash expenditure on

from approximately 61.0 per cent to about 32.0

per cent in Punjab and from nearly 36.0 per cent to just 15.0 per
cent in Bihar from a village located in the immediate vicinity of
the
food

focal

town

to the extremely remote village.

and non-food items, the

Even in other

share of cash component are higher

in villages near the town compared to those located away from it.
This is true both in Punjab and Bihar.
village

comparison

Finally, if a village-to-

is made between Punjab and Bihar, we observe

that the cash component of total household expenditure as also of

all

food-items

and

cereals

is

much

higher in Punjab than in

~2

Bihar.
Such

It is equally true in the case of non-food items as well.

findings

lend

further

substance

to

our contention that

Punjab households although enjoying a uniformly higher per capita

consumption practically for each commodity, yet are more prone toinflationary
and,

the

that

wages

in

pressures

economy

characterised

presumably

wages

in

operating

to
last

counterparts in Bihar,

kind for running their kitchen.

of

the

their

latter are depending, to a very large extent, on

contents

tends

vis-a-vis

kind
by
in

can

be visualized for an agrarian

semi-feudal

Bihar.

Whatever exploitative

The

land

relations,

are

dependence on kind-wages

increase as we move away from the urban focal town; in

village

of

Bihar

(approximately

18

kms. away from

Buxar), only 15.0 per cent cash expenditure is involved on cereal

consumption.
in

kind,

It can perhaps be concluded that the 'ills of wages

whatever

be their nature, operate more intensively in

the villages in the interior of the countryside in Bihar.

Distribution of Consumption Expenditure

In
absolute
average
its

level

of

per

section,

capita

we have observed that the

consumption

expenditure

of an

household in Punjab is significantly higher than that of

in

Bihar.

Since variations in consumption may

among the sample households, both within Punjab and Bihar,

may

be

expenditure
this

preceding

counterpart

exist
it

the

useful
among

objective,

to

analyse

the distribution of consumption

the various strata of sample households.

the

households

For

have been arranged into decile

in

groups,

8
order of their net household income . The

ascending

percentage

share

individual

commodity

rearrangement

of

each

decile

expenditure

in
has

the

total

been

as

worked

well
out.

as
This

has been done to facilitate comparison between the

employment-income-consumption

nexus

of the labour households in

the two states.

Table
is

unevenly

example,

cent

distributed

the

consumption
in

8.4 shows that the total consumption expenditure

among

bottom-most

the various decile groups.

decile has only 7.0 per cent share of

expenditure in Punjab and a little more than 6.0 per

Bihar.

On

the other extreme, the top-most decile has

nearly 17.0 per cent share both in Punjab and Bihar.

terms

of

For

decile-wise

distribution

of

shares

total

or

consumption

the

Although in

value of Gini ratio, the

expenditure

is

strikingly

similar in both the states, yet in absolute terms, each decile of

Punjab

is

example,

much
a

better~off

10.0

quantitatively

than its counterpart in Bihar.

For

per cent share for a decile group in Punjab is

much

superior to a 10.0 per cent share in Bihar.

The only good point of Table 8.4 is that in the distribution of a

much

smaller

consumption

expenditure,

the

Bihar

situation

observes the same pattern as in Punjab.

8.

Generally, in consumption studies, especially those based on

N.S.S. data,
total expenditure is used for classifying
various
strata
of households primarily because total
household income figures are not available. Since we have
the advantage of knowing income figures, we prefer to evolve
decile groups with income rather than expenditure levels.

284

Table
Distribution
Bihar.

Sl.
No.

of

Total

8.4

Consumption Expenditure

Percentage of
Households

in

Punjab

Percentage of Consumption
Punjab

Bihar

10.00

6.91

6.32

20.00

14.28

13.82

30.00

21.74

21.48

40.00

29.35

29.29

50.00

38.14

37.79

60.00

47.57

47.44

70.00

57.92

58.35

80.00

69.41

70.60

90.00

83.30

83.53

10

100.00

100.00

100.00

Consumption Concentration
ratio or Gifli Co- e f f i c i en t .

0.163

0.163

and

The

commoditywise

distribution

of

consumption

expenditure reveals a few further insights (Appendix Table A-8.1 ).

For example, the Gini ratios for cereals, gram and pulses, edible
oils,

salt and spices, all food items, fuel and light, etc.

extremely
that

low

in

are

both the study areas and it can be maintained

the distribution for these commodity groups has practically

no

skewness.

Then

distributional
products,
sugar

pattern

as

eggs

and

meat,

and

Bihar

reveals
regards
fish,

slightly

more

skewed

ependiture on milk and milk

vegetables and

frui~

gur and

processed food among the food items, and medicine and

health,

consumer

durables,

Bihar's

skewness

in the case of milk and milk products needs to

be

underlined

of

expenditure

more

in particular.
on

pronounced

suggests
which

that

are

more

on

status

value.

smaller

non-food

items.

The uneveness in-the distribution

in the case of Punjab compared with Bihar. This

better off would like to spend relatively

items, at least for its demonstrative effect and

Such 'luxury' expenditures are incurred by Bihar

as
on

the

those among the rural labour households of Punjab

these

balanced

among

marriage and social ceremonies is relatively

relatively

households

etc.

well,

but

on

proportionate

basis.

much lower scale; perhaps more

Hence,

the

for Bihar compared with that for Punjab.

Gini

ratio is

Lastly, in the

consumption of nutritious items such as milk and milk products on

the

food

side,

and,

footwear on the non-food side, as also in

marriage and other social ceremonies, the poorest among the rural
labour

households

of

Bihar

are either totally bereft of these

r-

286

items or account for only an insignificant proportion.

Expenditure Elasticities

and

'e'

8.5

other

related

the

groups,
Bihar,

Table

same

gives

commoditywise expenditure elasticity,

estimates.

although, as is expected, the values of elasticity differ

Bihar

the

a number of commodity

functional form fits well both for Punjab and

strikingly betwen the two areas.

in

For

none

basis

commodity

of the functional forms gives acceptable fits on

of

standard

groups

conveyance

If may be noted in passing that

statistical

criteria

in

respect

of

such as milk and milk products, gur and sugar,

and

conveyance

services,

consumer

durables

and

miscellaneous non-food items.

Some
food-

items,

states.

features

expenditure

However,

expenditure
some

broad

if

elasticities

are

as follows.

First, for all

elasticity is fairly high in both the

a

detailed

for

examination

different

food items,

important differences between the two states.

expenditure

elasticities

vegetables

and

fruits,

for
and

is

cereals,

meat,

processed

food

eggs
and

made

of

there are

For example,
and

fish,

beverages,

(including pan, tobacco and other intoxicants) are much higher in

Punjab
and

than

pulses.

in
The

Bihar.
higher

The reverse is true in the case of gram

expenditure

elasticities

for Punjab

households vis-a-vis those of their counterparts in Bihar in most

9.

Procedural
details
for the estimation
elasticities are given in chapter III.

of

expenditure

287

Table 8.5
Plausible Engel F\mctioDQ.. _ in Punjab and Bihar

Sr.
No. Commodity Group

~~~=---~~-----~2/~2----

;~~~;=---~~------~2~~2---

ional
Form

ional
Form

Elasticity( e)

Elasticity( e)

Cereals and Cereal

Products
Gram and Pulses
Edible Oils
Milk and Milk
Products
Meat, Eggs and Fish
Vegetables, Fruits,
etc.
Gur and Sugar
Salt and Spices
Processed food,
Beverages, Pan,
Tobacco, etc.

0.782

0.985

0.618

0.990

7
5
4

0.617
0.371
1.288

0.927
0.992
0.780

7
5

0.697
0.312

0.884
0.890

1
2

1. 954
0.955

0.891
0.927

5
5

0.787
0.465

0.432
0.599

7
5
3

0.507
0.333
0.904

0.902
0.939'
0.806

5
5

0.293
0.318

0.900
0.439

A.

All Food-items

0.781

0.987

0.757

0.983

10.
11.
12.
13.

Fuel and Light

Clothing and Bedding
Footwear
Conveyance a Conveyance Services
Medicine and Health
Consumer Durables
Miscellaneous Nonfood items
Marriage and Social
Ceremonies

7
3
5
5

0.486
2.065
1.279
0.584

0.870
0.824
0.778
0.690

7
3
5

0.199
1.848
0.516

0.831
0.868
0.246

3
5
1

0.692
0.923
0.832

0.545
0.738
0.776

0.554

0.247

1.609

0.888

1.928

0.950

All Non-food items

1.384

0.955

0.448

0.900

1.
2.
3.
4.
5.
6.
7.
8.
9.

14.
15.
16.
17.
B.

FUnctional Fonn :

1. Linear
2
R

2. Quadratic

3. Hyperbolic

Co-efficient of determination. .

4. Semi-log

R2

5.

Log-inverse

7. Log-linear

Adjusted Co-efficient of determination

288

food-items

bur

lower

consumption-basket
compared
case

in

of

gram

the

with the latter.

and

pulses clearly convey that

former is qualitatively far superior

The low expenditure elasticity in the

of gram and pulses for Punjab households than that of their

counterparts

in

Bihar

can be attributed to its substitution by

more nutritious commodity namely vegetables and fruits, which has

been made possible due to higher earning levels in Punjab.
Second,
elasticity

for

non-food

items

as

a whole, expenditure

is much higher in Punjab compared with that in Bihar ..

The same is true ip the case of other non-food items such as fuel
and

light,

health.
edge

clothing

This

over

shows

and

bedding,

that

footwear

and

medicine and

Punjab labour households maintain an

their counterparts in Bihar as regards non-food items

as well.
Third,
social
the
It

ceremonies

areas.
is

the

expenditure

elasticity

for

marriage and

is fairly high and greater than unity in both

However, Bihar figure is higher than that of Punjab.

due to the fact that expenditure on this item is governed

by social taboos than by per capita total expenditure or income.

The preceding analysis shows that there are significant
differences
labour
a

households.

higher

Bihar,

between

level
but

of

also

the consumption pattern of Punjab and Bihar

Not only that Punjab households are enjoying
living
their

compared with their counterparts in

propensity

to

spend

out

incremental income is higher than that of the latter.

of

every